(Report Producer/Analyst: Caitong Securities Research Institute Li Meichen)
New Zealand's GDP of nearly $250 billion maintained its growth trend, and the stock market weighted sector was public utilities. In terms of macroeconomics, the scale of New Zealand's economy has shown a gradual growth trend in the past decade, and its economic structure with the service industry as the mainstay and industry as the supplement is stable. In terms of capital markets, utilities have the largest weight, with the top three industries, including industry and medical, accounting for about 62% of the market capitalization. In terms of New Zealand's export structure, the livestock country has outstanding attributes, and the share of dairy products ranks first in the world.
1. New Zealand's economy is growing in size, and the stock market weighted sector is green utilities
In 2021, The size of New Zealand's economy will reach $250 billion, the total economic volume will show an upward trend, and the per capita GDP growth will be basically the same as that of the United States. New Zealand's total GDP has been similar to per capita GDP since 2010, showing an overall upward trend, rebounding rapidly after a sharp decline in 2014 and growing significantly in 2021. In terms of total, China's share fell from 2.4% in 2010 to 1.5% in 2021; In terms of PER CAPITA GDP, there was a slight decline from 2014 to 2015, but the growth rate was basically the same as that of the United States, several times higher than that of China.
New Zealand's economic structure, which is dominated by services and supplemented by industry, is relatively stable, and the proportion of agricultural added value to GDP is lower than that of China and the United States. In the three years from 2016 to 2018, the added value of New Zealand's service industry and industry stabilized at about 66% and 20% respectively. We make a horizontal comparison of the economic structure of China, Singapore and the United States, the economic structure of New Zealand is similar to that of the United States, with the added value of agriculture accounting for less than 10%, the industrial added value accounting for about 20%, and the service industry is much higher than that of China.
The New Zealand stock market has the largest utility weight, with the top three sectors accounting for about 62% of the market capitalization. Specifically, utilities have a combined market capitalisation of nearly NZ$25 billion, with industry and healthcare in the second tier at around 18 billion. In terms of the average market capitalization of various industries, utilities rank first with about 3.2 billion, while technology and finance are relatively low.
The top ten stocks by market capitalization are mainly in the power production industry, and the related stocks are mostly based on new energy power generation as the core business. Meridian Energy is an energy company that uses only wind, hydro and solar power, and Mercury New Zealand relies heavily on geothermal, hydro and wind energy.
2. The main destination of dairy products with the largest share of global exports is China
We dismantle New Zealand's exports from the two dimensions of major countries and regions and major trade commodities, and sort out the core export to and from new Zealand' countries and regions .
2.1. The global export share of dairy products and raw poultry products ranks first
New Zealand's export structure is prominent in terms of livestock country attributes. In 2021, New Zealand exports more than $1 billion in major commodities CR9 is about 73.2%, and dairy, raw poultry and meat CR2 reached 43%. At the same time, dairy products and raw poultry products are the main sources of trade surplus.
The share of dairy products and raw poultry ranks first in the world. Export share of the first commodity: HS04 Dairy products, raw poultry products New Zealand's export share reached 12%, the concentration of importing countries 0.19.
The downstream of the core commodity dairy products and raw poultry products is mainly beverage manufacturing. In terms of dairy products, the largest listed company in New Zealand by market capitalization is Fonterra (listed), and the remaining more important Westland dairy companies have been 100% controlled by the domestic leader Yili shares.
HS04 Dairy products and raw poultry products are mainly exported to China, Australia and Indonesia, with the share of the three being 42.1%, 4.2% and 3.7% respectively. The remaining countries with more than 5% HS04 export share are Germany, the Netherlands, France and the United States, which can better fill this gap in the event of poor supply in New Zealand.
We descended from HS2 to HS6 and set two criteria to screen the core subdivisions of New Zealand's exports (see table below): 1) Exports amounted to more than $1 billion; 2) The concentration of importing countries is greater than 0.5.
Commodities with the largest share of global exports are classified according to attributes
Wood 2 items: pine rough.
The above two commodities meet the top five conditions of export share and high concentration of importing countries, so New Zealand has strong bargaining power in the HS440321 and HS440322 chains.
440321 Large-size pine rough is mainly exported to China (share 89.3%). The remaining countries with a share of more than 5% of exports include the United States, Russia, and New Zealand has prominent control over the commodity export chain.
440322 Small-size pine roughs are mainly exported to China (share 81.1%). The remaining countries with an export share of more than 5% include Uruguay, and New Zealand also has prominent control over the commodity export chain.
2.2. The demand side is mainly digested by China, Australia and the United States
New Zealand export destinations can be divided into three echelons according to their share
First Echelon 20%-50%: China (32.5%);
Second Tier 10%-20%: Australia (11.5%), USA (10.5%);
Third Echelon 5%-10%: Japan (5.9%).
By screening the trade structures of China and the United States, which account for more than 10%, the trade structures of China and the United States are further split separately, so as to grasp the key major categories of commodities with an annual trade volume of more than 1 billion US dollars. Due to the lack of items in Australia that meet the amount filter, we do not expand it separately.
China: Core export destination for wood and wood products. In terms of trade volume, the three commodities accounted for about 73% of the total trade volume, of which dairy products and raw poultry products were the absolute core. In terms of share, the export of wood and wood products to China accounts for 65%, which has a certain dependence on the market.
The above two commodities mainly correspond to downstream industries mainly the dairy industry and the wood manufacturing industry. In terms of dairy products, because the upstream products are mainly dairy products and raw poultry products, the downstream is the dairy industry, and the representative listed companies with large market value are Bright Dairy, Yili Shares, Jiahe Food and Panda Dairy. In terms of wood manufacturing, the upstream products are wood and products, so the downstream is the decoration building materials, paper and home furnishing industries, and the representative listed companies with large market value are Wanlin Shares, Xintonglian, China Forestry Group, etc.
United States: A large category of goods without deep binding. In terms of trade volume, 3 commodities accounted for 48% of trade, of which meat was the main part. In terms of share, beverages, spirits and vinegar accounted for the highest proportion of the main share.
3. The middle and lower reaches of the manufacturing industry rely on imports, and consumer electronics and seats and other households are mainly supplied by China
We dismantled New Zealand from the two dimensions of major countries and regions and major trade commodities, and sorted out the core export to countries and regions & commodity chains of New Zealand.
3.1. Import dependence on automobiles, machinery and equipment is high, but the supplier countries are scattered
New Zealand's import structure is characterized by the weakness of the middle and lower reaches of the manufacturing industry. In 2021, New Zealand imports more than $1 billion CR9 is about 60%, ranking in the top three in terms of automobiles, mechanical equipment and electrical equipment is the main source of trade deficit.
In terms of segmentation, each product is not a major import market, and the corresponding supplier countries are generally dispersed. The concentration of household goods supply countries is relatively high at 0.48, and the concentration of the remaining importing countries is lower than 0.5.
The core commodities of automobiles and parts, machinery and equipment and parts are mainly responded to in the industries of automobiles and machinery and equipment. In terms of automobiles, the downstream is mainly for turners automotive group and Cologne automotive dealers.
We descend from HS2 to HS6 and set two criteria to screen core goods imported from New Zealand (see table below): 1) The import amount is more than $1 billion; 2) The concentration of supply countries is greater than 0.5
The only oil share of global imports ranks in the top five and is not a significant consumer.
3.2. Import supply mainly comes from China and Australia
New Zealand import sources can be divided into five echelons according to their share:
First Echelon 20%-50%: China (23.7%);
Second Tier 10%-20%: Australia (11.3%);
Third Tier 5%-10%: United States (8.6%); Japan (6.4%).
We have further split the trade structure of China and Australia, which accounts for more than 10% of the shares, so as to grasp the key major categories of commodities with an annual trade volume of more than US$1 billion, but there are no major categories of commodities in the Australian-New Zealand chain that meet the screening criteria, so we only make a specific analysis of the core trade commodities imported from China.
China: The main source of imports of electrical equipment, mechanical equipment and household goods. In terms of trade volume, 3 commodities accounted for about 43% of the total trade volume, of which electrical/mechanical equipment was the main body; In terms of share, the proportion of household goods imported from China reached 69%, which has a high dependence on the source.
Electrical/mechanical equipment mainly corresponds to the electric power and mechanical equipment industries, and household products mainly correspond to light manufacturing industries. The main commodities under the classification of electrical equipment are computers, and the main commodities under the sub-category of mechanical equipment are telephones, which belong to the oem industry chain of mainland electronics consumer electronics; The main commodities under the household goods sub-item are wooden frame upholstered seats, and export-oriented companies with high market value such as Henglin shares and Yongyi shares.
4. China's import of pine roughs is closely linked, and imported dairy products have a greater impact on Australia
First, it sinks to the six-digit code level, screens goods with a trade volume of more than $1 billion and China's share of more than 75% of Australia's imports/exports, and sorts out the industry positions of Chinese importers and exporters.
In terms of Chinese imports, there are two commodities that are more closely traded, namely milk and solid cream and large pine roughs.
In the Sino-Singapore trade chain, milk and solid cream accounted for 51% of new exports and 84% of China's imports.
First of all, it is exported by New Zealand's leading dairy companies such as Fonterra and Westland Dairy, and imported and sold by Chinese dairy companies such as Jiahe Food, Yili Shares, and Bright Dairy.
We screened countries with a global export share of more than 5% and found that the Netherlands is the world's second largest exporter of milk and solid cream, which can replace a small part of New Zealand's supply to some extent, but the replacement rate is only 1/9.
In the Sino-Singapore trade chain, pine rough accounts for 89% of Australia's exports and 75% of China's imports.
It is exported by Fletcher Construction Co., Ltd., Carterholt Awei Timber Co., Ltd., etc., and Chinese timber companies such as Wanlin Co., Ltd., Xintonglian, China Forestry Group Co., Ltd., etc.
We screened countries with a global export share of more than 5% and found that Uruguay is the second largest exporter of pine rough in the world, which can replace the supply of new Zealand pine rough to some extent, with an substitution ratio of about 1/5.
In terms of China's exports, the four commodities all showed greater new demand for China, but they were not major markets, each accounting for less than 1% of China's export share, which had basically no impact on the performance of domestic listed companies.
5. Risk Warning
There is a deviation in the caliber of the data of customs and statistics bureaus of various countries; There is a deviation in the import and export trade volume using fob and CIF prices; The understanding of the regional economic framework and situation is not in place.
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